Medellin-based multinational electric power giant EPM announced August 31 that insurer Mapfre’s just-issued US$100 million payment for physical damages at the estimated US$5 billion Hidroituango hydroelectric project now brings total damage payments from Mapfre to US$450 million.

EPM recently boosted the estimated cost of the Hidroituango project to COP$18.3 trillion (US$4.877 billion), since a 2018 diversion-tunnel collapse resulted in about a US$2 billion cost overrun -- once including both physical damages and even-greater losses from nearly four years of lost power sales.

With restoration work now well underway, EPM foresees the first two power generation units at Hidroituango coming on-line in the second half of 2022, while the six remaining units would come on-line between 2023 and 2025, eventually enabling a maximum 2.4-gigawatts of power capacity.

The Mapfre policy covers up-to US$2.56 billion for physical damages and up-to US$628 million for lost power sales.

US$1.29 Billion Debt Request Ahead of UNE-Tigo Divestment Plan

On a related front, EPM revealed August 31 in a filing with Colombia’s Superfinanciera oversight agency that it is seeking authorization to contract another US$890 million in external debt, plus another US$400 million in Colombian Treasury loans equivalent to COP$1.5 trillion. As a result, EPM’s debt load potentially could grow by US$1.29 billion.

Meanwhile, to help pay for the cost overruns at Hidroituango and simultaneously reduce the need for more debt funding, Medellin’s City Council plans to begin hearings next month on EPM’s request to sell its 50% share of the UNE-Tigo telecom/internet/cable-TV joint venture that it shares with Spain-based Millicom.